Nissan To Invade Low-Cost Auto Market
by Ryan Thomas
The Nissan Motor Co., Japan’s third-largest auto
manufacturer, is designing a $2,500 car to compete in India with the
low-cost model planned by the Tata Motors Ltd, Chief Executive Officer
Carlos Ghosn said. “We are working on how we can make a car for $2,500,”
Ghosn told reporters at a dinner in Versailles, France. A Nissan advance
engineering group is doing the study, he added.
Automakers are moving quickly to trail Renault SA’s footsteps by offering
cheaper models for the fast growing markets in Asia, the Middle East and
South America. The second-largest automaker in France that owns 44 percent
of Nissan will be rolling out its no-frills Logan sedan in Argentina,
Brazil, India and Iran. Ghosn heads both Renault and Nissan. Tata, India’s
third-biggest car maker, plans to sell a car priced at about $2,500 by the
year 2008.
According to government estimates, India’s car market may triple to 3mn
vehicles a year by 2015. “In India one competitor has announced a car for
next year at $2,500,’’ Ghosn said. “I take that challenge very seriously.”
The Nissan CEO already had said in April that the company intends to sell
cars in India for less than $3,000.
The Japanese automaker seeks to win business from auto rivals including the
Suzuki Motor Corp, whose Maruti Udyog Ltd unit commands a 50 percent market
share in India. The Nissan Motor India Private, Ltd also contributes towards
social activities with all the employees. The company distributes uniforms
and stationeries to schools affected by the recent floods in Mumbai.
“If you ask any car manufacturer if they can make money on a car that costs
$2,500, the answer is always going to be no,’’ Ghosn noted. “Until somebody
does it.’’ The Tokyo-based automaker said April 26 that its profit decline
46 percent to 82.2bn yen in the quarter ending March 31 on weak American
sales.
In connection with Nissan’s struggle to alleviate its sales, it will be
introducing its next-generation Maxima, which is said to be a true 4DSC
(short for 4-Door Sports Car). The new vehicle is not only equipped with the
peculiar Nissan clutch master cylinder. This is because the automaker’s pool
of engineers has made the new Maxima more mature and luxurious.
A Nissan insider described the new vehicle as, "Unlike anything we've ever
done before.” The new Maxima will be more aggressive than ever and will
flaunt a coupe-like shape, likened to the Mercedes-Benz CLS. The car will
also slot from the Z and the upcoming GT-R to strengthen links to the
performance machines. Aside from the legendary VQ-series engine, the new
Maxima will also feature Nissan's brand new Alliance turbodiesel engine.
The automaker is sending the new Maxima with high hopes. Its striking
performance and affordable price could put it back on track. The bolder and
high-performance Nissan Altima is set to arrive in 2009.
Nissan will also be releasing the 2007 model year 350Z in Australia. The
vehicle is equipped with a more powerful, next-generation engine, revised
exterior styling and new exterior color palette. At the heart of the 2007
model year 350Z is Nissan’s award winning next generation engine - the
designated VQ35HR.
Nissan Australia’s managing director and chief executive officer, Shinya
Hannya, commented on the update to the company’s halo model in the range:
“The changes are designed to not only improve on the performance of the 350Z
but build on its reputation as one of our best performance sports car.”
Separately, the Japanese automaker is happy to announce that its hybrid may
continue to claim the Alternative Motor Vehicle Credit. This fact is
attested by the Internal Revenue Service. The said announcement came after
the IRS concluded its quarterly review of the number of hybrid vehicles
sold.
To note, Nissan sold 2,094 qualifying vehicles to retail dealers in the
quarter ending March 31, 2007. The allowable credit amount for the 2007
Altima Hybrid, the automaker’s only certified hybrid vehicle, is $2,350.
Taxpayers may claim the full amount of the allowable credit up to the end of
the first calendar quarter after the quarter in which the manufacturer
records its sale of the 60,000th vehicle.
Ryan Thomas is a native of Denver, Colorado. He grew up in a family of car
aficionados. He now resides in Detroit where he owns a service shop and
works part time as a consultant for a local automotive magazine. You can
visit Nissan clutch master cylinder for more information.
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